Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
CGST - Acts + GST Rates GST Ntf. GST Forms GST - Manual GST - FAQ State GST Acts SGST Ntf. I. Tax Manual
Extracts
Home List
← Previous Next →

S. Kathirvel Prop. Kiruthika Textiles, S. Selvaraj Prop. Nallathambi Tex Versus Dy. CIT, Central Circle, Salem

I.T.A Nos. 1257/Mds/2009, I.T.A Nos. 1258 to 1264/Mds/2009 - Dated:- 13-8-2010 - N. Barathvaja Sankar (Vice-President) And Hari Om Maratha (Judicial Member) For the Appellant : S. Sridhar For the Respondent : P. N. Kamala Devi ORDER All the above appeals deal with common question of law and facts and, therefore, they are decided together by this order. The assessment years involved in these appeals are 2000-01 to 2006-07. 2. The facts of all these appeals are almost identical and are mentioned h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

37/- more and above the unaccounted sale admitted by the appellant at ₹ 76,16,558/-. During the course of the search the appellant was found to have carried on parallel business in textile outside the books of the accounts. These was done by encashing the sale proceeds through One day clearing agent who help to encash third party cheques through various bank accounts. For carrying out these operations, the one day clearing agents have floated various partnership firms and proprietary conce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d u/s 153A the appellant offered income at 5 % on the above turnover of ₹ 76,16,558/-. 7. The income offered in respect of the one day clearing transactions, by the appellant is tabulated below: - Assessment Years Unaccounted Sales Income offered @ 5 % on Turnover Rs. Rs. 2000-01 24,70,769.00 1,23,540.00 2001-02 16,50,273.00 82,520.00 2002-03 4,86,951.00 24,350.00 2003-04 6,33,567.00 31,680.00 2004-05 NIL NIL 2005-06 21,15,048.00 1,05,750.00 2006-07 2,59,950.00 13,000.00 TOTAL 76,16,558.00 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

L 2,21,71,913 4. Sri Siva Tex (SST) 2000-01 20,26,667 30,76,184 2001-02 3,51,664 2002-03 6,97,853 5. Anburaj (ANB) 2000-01 30,920 2001-02 1,09,584 2002-03 1,61,574 2003-04 1,10,602 2004-05 2,97,200 2005-06 21,49,561 2006-07 32,21,599 60,81,040 GRAND TOTAL 3,13,29,137 In this regard the plea of the appellant is that the adoption of the figure of suppressed sale of ₹ 3,89,45,695.00 for the purpose of quantifying the profit is not sustainable. The ld. Counsel for the appellant submitted that, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cheques out of the cheques shown by you, have no connection to our concern. The worth of the cheques related to our concerns is about ₹ 76 lakhs and there is no connection between the remaining cheques and our concern. 8. The ld. Counsel further submitted that the one day clearing agents were subjected to search and on the basis of some records relating to the one day clearing agents the Assessing Officer had noticed certain abbreviations of which related to various parties like appellant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n clearing many such Cheques and DDs and whose search assessments are also in progress in this office) has expressed inability to identify the third parties in the absence of specific details in his possession. In view of the above an aggregate amount of ₹ 3,13,29,137/- representing the parallel transaction carried out through One-day clearing agents is treated as Undisclosed Turn Over in the hands of the assessee. 9. The ld. Counsel submitted that the ADIT supplied copies of cheques and D .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

j, employee of the appellant on 31.03.2006 vide Page No. 41 of the paper book had stated that the unaccounted transactions routed through one day clearing agents would be to tune of ₹ 25 Lakhs. It is also submitted that though the appellant had quantified the unaccounted sales at ₹ 76,16,558/-, neither the search party nor the Assessing Officer during the assessment proceedings has not recorded any finding from the one day clearing agent, to substantiate their adoption of figure at & .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion collected by the Income Tax Officer, it is the duty of the Income-tax Officer to satisfy himself by making independent enquiry from sources considered reliable by him and decide whether the information passed on to him is true or not. If as a result for his own independent enquiry he comes to the conclusion that the information received by him is true, he is at liberty to act there on after disclosing it to the assessee and affording him a reasonable opportunity of rebutting it. The copy of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

2 TTJ 845 (JP) JAGADAMBA RICE MILLS Vs. ACIT, 67 TTJ 838 (CHD) . V.V.S ALLOYS LTD., Vs ACIT, 68 TTJ 516 (ALL) 11. The ld. Counsel submitted that, in these circumstances, the addition made by the Assessing Officer and sustenance of the same by the ld. CIT(A) are based without any cogent, evidence and material, and based on purely suspicion, surmises, conjectures and imagination and prayed for the deletion of the same. 12. The ld. DR submitted that the Assessing Officer was justified in adopting t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

at the Gross Profit on the unaccounted sales would be at 5 % and therefore adoption of G.P. at 7.24 % at average rate is not sustainable. The ld. Counsel has also pointed out the Assessing Officer had not given allowance for the commission paid to one day clearing agents and prayed for sustains of Gross Profit @ 5 %. 15. The ld.DR vehemently argued and supported the action of the Assessing Officer in adopting the Gross Profit @ 7.24 %. 16. The next common issue for the assessment years 2000-01 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

icer itself is not sustainable the working made for the unaccounted purchases based onthe above alleged sales is erroneous and not sustainable. He further submitted that even assuming that the above working made by the Assessing Officer applies to the sale figures adopted by the appellant at ₹ 76,16,558/-, there is no justification for addition towards unaccounted purchases inasmuch as the appellant and his group concern engaged in the business of textiles by purchasing goods on credit and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hase were effected on credit. The Question Nos. 3 & 13 and Answer to that are as under : - Question No. 03. In what manner you operate the business transactions of the above said concerns. Answer : - We purchase yarn for all our concerns from the mill through bills. The said purchases are on the credit basis. We dye the said yarn. The said dyed yarn is given to weaver s loom on remuneration for the production as towels and lungis and receive the same. The same is sold to the party through bi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es on credit basis and without accounting, settle the credit transaction in piece meal from the amount received from the one day clearing. 18. He also placed reliance on the following decisions: INDIA SEED HOUSE Vs ACIT, 69 TTJ 241 (DEL) (TM). CIT Vs PRESIDENT INDUSTRIES 258 ITR 654 (GUJ) TARA CHAND SHANTILAL Vs. ITO, 28 TTJ 128 (JP) CIT Vs AGARWAL ENGG CO. 302 ITR 246 (P & H) CIT Vs GURU BACHHAN SINGH J. JUNEJA 302 ITR 63 (GUJ) 19. The ld. Counsel argued that, the addition made by the Asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Partner Sri. P. Anbalagan and Sri. P. Eswaran retired from the Partnership Firm in August 2000 and on retirement the amounts standing to their credit in the capital account were paid through cheques. The ld. Counsel referred to Page No. 85 to 101 and 119 to 127 of the paper book to substantiates the above fact. However Assessing Officer has made an addition of ₹ 40,00,000/- invoking the provisions of Sec 69 C of the act in respect of alleged payment of ₹ 20,00,000/- each to Sri. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eld that the additions based on survey statement is not maintainable in the absence of any material. 24. The ld. Counsel in support of the above submissions which were made during the course of hearing before us, placed reliance on the following decisions : - MANOJ PRABHAKAR Vs ACIT, 84 TTJ (Del) 625. CIT vs CONCORDE CAPITAL MANAGEMENT CO LTD. 25 DTR (Del) 97. ACIT Vs. JAGUSTE TANDALE & CO., 77 TTJ (Pune) 117 Dy. CIT Vs PRAMUKH BUILDERS 115 TTJ 330 (AHD) (TM). 25. He also submitted that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

recorded from the appellant during the course of search, post search and during the assessment proceedings, regarding the alleged payment on retirement of the partners Sri. P. Anbalagan and Sri. P. Eswaran which goes to establish that there was no proper material or proper recording of statements in these regard to substantiate the action of Assessing Officer in making the addition of ₹ 40,00,000/-. 26. The ld. Counsel argued that, the addition made by the Assessing Officer and sustenance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t order which reads as under: - The income in respect of the Job Works is already estimated and offered @ 10 % on the Turnover. However, the asessee further explains that the purchases evidenced by the Seized Materials are also unaccounted. On verification of Bills seized, a sum of ₹ 32,760/- bone out of the 11 Bills in August 2005 is brought to assessment in 2006-07 towards the initial unaccounted purchase in this respect . 29. We have carefully considered the submission made by the both .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng document or evidence was found during the course of search from the possession of the appellant. Further the addition has been made on the basis of certain abbreviations found in the records of the one day clearing agent based on which the ADIT collected copies of cheques and demand drafts from various bank and matched the abbreviations with that of the names of the appellant group concerns. When the copies of the cheques and demand drafts confronted with the assessee, he identified the trans .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ish that the transactions pertains to the appellant. The Assessing Officer himself has given a finding in his order to the fact that the one day clearing agent do not keep any specific records regarding the actual parties and had expressed inability to identify the third parties in the absence of specific details in his possession (vide para 5.3.1 page no. 6 of the assessment order). The Assessing Officer never exercised any thing to establish the fact, from the one day clearing agent or from th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

3,13,29,137/- by the Assessing Officer to more and above ₹ 76,16,558/- admitted by the appellant is erroneous and we therefore direct the addition made by estimating income at 7.24 % on the alleged unaccounted sale of ₹ 3,13,29,137/- for the assessment years 2000-01 to 2006-07, to be deleted. 30. We have carefully considered the submission of the both parties and have also seen the case laws relied upon by the ld. Counsel. We feel that the submissions made by the ld. counsel have for .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ars 2000-01 and 2005-06 respectively towards unaccounted purchases to be deleted. 31. We are heard the submission of the ld. Counsel and the ld. DR. We find force in the submission of the ld. counsel and also the case laws relied on by him. In this regard, we are of the opinion that except a statement from the erstwhile partner Sri. P. Eswaran that he has received ₹ 20,00,000/- on retirement, no other material in support of the same was unearthed by the Department. Even during the assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the addition of ₹ 40,00,000/- is deleted. 32. Here also the appellant stated that the entire basis of the assessee is on credit basis as already submitted and as such there is no justification for the addition. 33. The ld.DR supported the order of the Assessing Officer. 34. After hearing both the parties we are of the opinion that as already held that the appellant is doing business on credit, the addition of ₹ 32,760/- is to be deleted. 35. In the result, the appeals in I.T.A.Nos.12 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

equent upon the search, action u/s 153C was initiated in this case. The assessee filed returns of income for various assessment years but for assessment year 2001-02, the assessee has shown a gift of the above mentioned amount for which as per the Assessing Officer, no evidence was filed that this gift was received from co-brother, father-in-law and others on various dates in the month of September 2000. Therefore, the Assessing Officer added this amount as unexplained credit. This amount was co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version